The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1887-11-10

Stock Exchange Committee, composed OF
business men and legal men of the highest
standing, both as to intelligence and iuteg-
rity, require of the issuing house the pro
duction of a complete and verified list of
the names and addresses of all the sub
scribers to the loan and the amount al
lotted to each subscriber respectively.
The committee must ascertain if the sub
scriptions and allotments are made in good
faith, and must find that no allotment has
been made to any member OF the syndi-
cate unless the subscription by the public
has fallen short of the amount of loan
called for. Only upon such finding will Of
fetal recognition be given by the Exchange
to the bonds.
This is done to prevent stock jobbery
with national securities, and the conse-
quent impairing of the credit of the Gov
eminent whose bonds are so placed. 1t is
done likewise to protect the public who in
vest in such securities in good faith, upon
the express assurance of the Stock Ex
change Committee that the representations
made in placing such stock before the pub
lie are justified and that the quotations at
which they are placed are in good faith
the representative value of those securi-
ties, and that the business world can with
confidence expect the prompt payment of
the interest aCcruing on such securities.
Those bonds then acquire value and COM
mercial usefulness. because the banks and
commercial houses then only recognize
their value.
In the course OF time, if nothing unto
ward happens, and the payments of inter
est are promptly made, the premium
reaches point which represents unit of
interest, and the bonds can be converted at
par value into others bearing less interest,
until the loan be placed at the same rate
which other older and richer countries
have obtained through the good faith
shown in the dealings OF their Govern
ments with the financial world of London.
This course we followed, and despite the
violent, unfair and unjustifiable attacks of
a certain portion of the American press,
not only was the loan placed and regularly
listed, but through the effort and aid of
the capitalists who were friendly disposed
to this Kingdom and its interests, the Sc
Curities advanced on their own merit to
a premium of 8 per centum above their
par value. At this figure it remained
under unimportant fluctuations and we
had perfected the arrangements to place
the remaining quarter of the loan (f1OO,-
OCO) at that figure (the benefit of which ad-
vance would have accrued entirely to the
Hawaiian peOple) when news reached Lon
don of the change OF Administration. So
much better informed are the commercial
public there upon Hawaiian affairs than
would be supposed in the Islands that the
normal change in the Government hardly
affected the value of the Hawaiian securi-
ties, but when the false news was dissent
mated there that the new administration
contemplated reputation the Hawaiian
bonds fell in value from los to So.
As is well known to Your Excellency, at
that time there were two local private en-
terprises moOted, which were supposed in
London and acknowledged in Honolulu to
be OF great importance, and carried in
them the promise of great benefit to our
community, viz: The projected railroad
of the Hon. Samuel G. Wilder and the
colonization undertaking of B. F. Dilling-
ham, ESQ.
The projects had no relation to or con-
nection with one another, and were being
taken in hand by different moneved circles
in London, yet the effect of those rumors
of reputation by the Hawaiian Govern
ment was such that both projects had to
be abandoned-we hope, however, only
temporarily. 1t is hardly necessary to
mately the possibility of obtaining cheap
capital tor private and semi-private enter
prises is interviewer with the establish
ment and maintenance of a sound national
Credit, and this can be said with greater
force of the Hawaiian Islands than Of
other countries, such as mining cOun-
tries; in the latter the gaming spirit as
sists-here our undertakings obtain rec
ommendable character only through the
showing of stability, intelligence, economy
and hon esty of the Government
Through the efforts of those to
whom this business was entrusted, the
Hawaiian credit was firmly established in
London, and that under conditions which
were by no means onerous or exacting; so
that private persons in England who are
largely interested in business in these isl
ands, were astonished as well as pleased at
the success which attended those efforts
The fact of the establishment of this
credit was, however, not the only advant-
ageous result. The frmness in value
which the Hawaiian bonds attained in
duced some banking houses to propose to
us as follows:
If the Hawaiian Government desired to
issue the remaining quarter of the national
loan, 1t could deposit its bonds without IS
suing them at that time, as collateral secu-
rity for from eighty-five to ninety-five per
centum of their par value, and obtain an
open loan TO that amount, at interest
small fraction above that ruling at the
banks, say between four and five per cent.
per annum for such a length of time as
would enable the Hawaiian Government to